Lipid-poor apolipoprotein A-I (apoA-I), the major HDL protein, promotes the efflux of cellular cholesterol and phospholipids by an active process mediated by the cell membrane transporter ABCA1. Humans deficient in ABCA1 suffer from Tangier disease and accumulate cholesterol-laden macrophages in many different tissues. Animal studies demonstrate that HDL's ability to remove cholesterol from artery wall macrophages is key in mediating its cardioprotective effects. We have shown that oxidation at specific residues impairs apoA-I's ability to remove cholesterol from cells by the ABCA1 pathway. We also found markedly elevated plasma levels of oxidized HDL in plasma of subjects with either diabetes or cardiovascular disease (CVD). Recent studies demonstrate that the cholesterol efflux capacity of human serum HDL associates strongly and negatively with CVD status and is independent of HDL cholesterol and apoA-I levels. We have recently demonstrated that oxidation of apoA-I by myeloperoxidase (MPO) strongly correlates with impaired sterol efflux in CVD subjects. Here, we present preliminary evidence that MPO-oxidized apoA-I associates with impaired sterol efflux in diabetes both in mice and humans, raising the possibility that damage mediated by MPO is one pathway for the generation of dysfunctional HDL. Oxidation of HDL in diabetic subjects could impair the cardioprotective effects of HDL by altering its ability to remove cellular cholesterol. Because our preliminary data strongly suggest that diabetic humans have high levels of MPO-oxidized HDL, we will test the hypotheses that (a) HDL in diabetic mice exhibits increased oxidation, and that oxidation contributes to impaired sterol efflux capacity and diabetic atherogenesis, (b) HDL oxidation and/or impaired sterol efflux capacity identify diabetic subjects at increased risk of cardiac events better than current risk factors.